L is B Co., Ltd. FY2026 Q2 Earnings Deep Dive Report

1. Overview and Reaffirmation of Business Foundation

L is B Co., Ltd. (Securities Code: 145A) is an IT solutions provider offering a Field DX Platform tailored for workers and enterprises in "on-site" industries, such as construction. The company centers its operations around its flagship business chat tool for field operations, "direct," while deploying a suite of specialized applications and AI functions designed for field tasks.

Field operations often involve limited PC access, with manual paperwork and photo management posing significant burdens. The company addresses these challenges by providing a communication infrastructure that allows tasks to be completed entirely on smartphones or tablets, supporting the behavioral transformation (innovation) of its clients.

Currently utilized at over 10,000 corporate job sites , the platform has established itself as a comprehensive field DX infrastructure, serving major general contractors, large construction firms, as well as sectors including railways, infrastructure, logistics, local governments, and financial institutions.

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2. FY2026 Q2 Earnings Highlights

For the cumulative second quarter of the fiscal year ending December 2026, the company achieved significant year-on-year growth in both revenue and profit , driven by the steady expansion of its core business and contributions from consolidated subsidiaries.

Slide Commentary: Performance Overview and Progress Rate

The slide above presents the cumulative results for the second quarter and the progress against full-year earnings forecasts. This slide is significant because it clearly demonstrates that both revenue and profit at each stage show high year-on-year growth rates , and the progress rate against the full-year forecast is at a very high level compared to historical trends .

Specifically, the following figures are presented:

• Net Sales : ¥1,371 million (+33.4% YoY)
• Gross Profit : ¥854 million (+27.5% YoY)
• Operating Profit : ¥151 million (+63.1% YoY)
• Ordinary Profit : ¥133 million (+62.3% YoY)
• Net Income Attributable to Owners of Parent : ¥112 million (+84.7% YoY)

Progress against the full-year forecasts (Net Sales: ¥2,823 million, Operating Profit: ¥266 million) has reached 48.6% for sales and 56.6% for operating profit. The operating profit progress rate significantly exceeds the levels of the past two years (FY2025 Q2 cumulative: 45.8%; FY2024 Q2 cumulative: 31.3%), indicating strong momentum.

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3. Price Revision of "direct" and Strengthening of Revenue Base

To maintain and improve service quality and further strengthen its operational foundation, the company implemented a price revision for its flagship service, "direct."

Key Details of Price Revision

• Revision : 20% increase in usage fees
• Effective Date : Applied from April 1, 2026
• Monthly Fees by Plan :
  • Basic Plan: ¥6,000 → ¥7,200
  • Plus Plan: ¥12,000 → ¥14,400
  • Premium Plan: ¥27,500 → ¥33,000
  • Max Plan: ¥50,000 → ¥60,000

The impact of this price revision has been reflected in the financial indicators from the second quarter of FY2026, contributing significantly to the improvement of ARPU (Average Revenue Per User) and the qualitative enhancement of recurring revenue .

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4. Evolution of Field AI Functions and Establishment of Safety

The company group's DX platform is evolving from a simple chat tool into an "AI utilization interface for the field." In particular, initiatives are underway to balance the introduction of cutting-edge technology with operational safety.

Slide Commentary: "direct Assistant" and AIMS Certification

The slide above illustrates the launch of the early trial for the new "direct assistant" feature and the advanced AI governance framework behind it. This slide is critical because it addresses the primary concern in corporate generative AI adoption— "security and reliability" —by guaranteeing it through objective third-party certification, creating a decisive differentiator from competitors.

The company has obtained the first AIMS (AI Management System) certification (ISO/IEC 42001) from the Japan Quality Assurance Organization (JQA). Provided under a safe AI operational framework based on international standards, "direct assistant" features the following:

1. Knowledge Management : Daily chat interactions are not leaked but accumulated and utilized as valuable organizational assets and knowledge .
2. Immediate Deployment : All employees can use it immediately without additional account costs, removing barriers to entry.
3. Guaranteed Safety and Security : AIMS certification allows even large enterprises with strict security standards to adopt it with confidence.

Specific examples of AI utilization in the field include "automatic checking of brought-in tools" and "automatic cloud search and sharing of past industrial accident cases," expanding functions that directly contribute to on-site safety, health, and productivity.

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5. Analysis of Sales Trends and Revenue Structure (Recurring vs. Shot)

We analyze the steady growth in sales and the revenue structure that supports it.

Slide Commentary: Quarterly Sales Trends and Recurring Revenue Stability

The slide above visualizes the quarterly sales trends from Q1 2021 to Q2 2026, broken down by category (Recurring/In-house services, OEM, Staffing, Shot, etc.). This slide is extremely important because it allows one to see at a glance that the company's revenue structure is supported by a high level of recurring revenue while drawing a multi-layered growth trajectory through the consolidation of group companies.

Sales for the second quarter (Q2 2026 standalone) reached ¥706 million (+37.4% YoY). Key points of the sales breakdown include:

• Steady Expansion of Recurring Revenue : Sales from in-house services (such as "direct") have grown to ¥402 million , solidifying the revenue base.
• M&A and Consolidation Effects : The consolidation of System M's Co., Ltd. and IU BIM STUDIO Co., Ltd. has added new revenue streams such as BIM engineer staffing and contract development.
• Recurring Revenue Ratio : The consolidated recurring revenue ratio stands at 88.9% , and 96.3% for L is B standalone, maintaining an extremely high level of recurring nature.

Furthermore, as client companies deepen their DX efforts, there is an increasing demand for "individual DX consulting" and "custom development projects for AI utilization" (shot revenue) beyond simple chat implementation. This creates a cycle where both recurring and shot revenues expand synergistically.

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6. Response to Communication-Challenged Areas and Group Synergy

① Support for Starlink Direct

By supporting the satellite communication service "Starlink Direct" for smartphones, the company has enabled text messaging and field photo sharing via "direct" even in "out-of-service" areas such as construction sites, mountainous regions, and disaster-stricken areas. This significantly enhances its value as a corporate BCP (Business Continuity Plan) solution .

② Status of Consolidated Subsidiaries

• System M's : Transactions with existing clients continue, performing steadily at the same level as the previous year (FY26/12 Q2 cumulative sales: ¥109 million, operating profit: ¥19 million).
• IU BIM STUDIO : Recorded FY26/12 Q2 cumulative sales of ¥203 million and operating profit of ¥22 million . It is expected to absorb goodwill amortization (¥22 million) and post an operating profit exceeding goodwill amortization for the full year, strengthening its ability to solve challenges in the BIM process from architectural design to construction and maintenance.
• directX Ventures Fund I : Has invested in 8 startups engaged in B2B IT and products for field workers, promoting the creation of medium- to long-term business synergies.

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7. Summary of Earnings Highlights and Future Growth Strategy

The growth story of L is B, as seen from the FY2026 Q2 earnings, can be summarized by the following elements:

1. Improved Profitability : Due to the 20% price revision of "direct" and the expansion of high-margin recurring revenue, consolidated operating profit increased by +63.1% YoY , and adjusted operating profit achieved a significant margin improvement of +131.4% (¥75 million).
2. Fusion of AI and Governance : Leveraging overwhelming reliability through the acquisition of Japan's first AIMS certification (ISO/IEC 42001) to promote the deployment of "direct assistant."
3. Expansion of Use Cases : Ensuring communication in out-of-service/disaster areas via Starlink Direct support , and expanding the approach to design, construction, and maintenance through the acquisition of BIM solutions .
4. Expansion of OEM Deployment : Steady horizontal expansion of OEM bases for specific industries, such as "LoGo Chat" for local governments (used by over 80% of municipalities nationwide, 1,555 in total) and "Shinkin direct" for the credit union industry.

By fusing cutting-edge technologies such as AI, satellite communication, and BIM while keeping ease-of-use—which addresses the "gritty" challenges of the field—at its core, the company is further solidifying its unique platform position in the field DX domain.